Intel and AMD Clash Over Huawei Chip Sales, Highlighting US Sanctions and Market Dynamics

Intel Corp INTC has successfully navigated through attempts to block its substantial chip sales to Huawei, a major Chinese telecom company facing heavy sanctions. 

This development allows Intel, one of the leading global chipmakers, additional time to engage in transactions with Huawei despite ongoing pressures on U.S. President Joe Biden to cancel a license granted by the previous administration. 

This license enables Intel to supply Huawei with advanced laptop processors, a move contested by Intel’s competitor, Advanced Micro Devices Inc AMD, and proponents of stricter sanctions against China, citing unfairness and national security concerns, Reuters reports.

According to Canalys analyst Emma Xu, Intel remains a crucial supplier for Huawei’s laptops, suggesting significant implications for Huawei’s product range should restrictions tighten further.

Despite being placed on a trade restriction list in 2019, Huawei obtained licenses for certain U.S. suppliers, including Intel, to continue selling specific items to it. 

AMD’s subsequent failure to get a similar license led to a dramatic shift in the market share of Huawei laptops powered by AMD chips, showcasing the direct impact of these regulatory decisions on competitive dynamics within the tech industry.

Previously, U.S. chip companies, including Nvidia Corp NVDA and Intel, had urged the U.S. government to go softer on its China semiconductor policy, considering the importance of the market.

Reports also indicated Intel as the leading contender to bag billions of dollars in U.S. government funding under the Chips Act. The facilities could cost $3 billion – $4 billion, with U.S. subsidies coming from the $39 billion Act.

Analysts hail Intel as a key artificial intelligence technology beneficiary led by Nvidia Corp NVDA.

First Trust Nasdaq Semiconductor ETF FTXL and Invesco PHLX Semiconductor ETF SOXQ can help investors gain exposure to Intel.

Price Action: INTC shares traded higher by 0.29% at $44.99 on the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image: Shutterstock/ monticello